Some people feel quite strongly that it is either right or wrong to borrow money to buy a car. The reason that opinion is split probably has something to do with peoples personal opinions about borrowing or mainly because different people see the need for a car differently.
Borrowing money for anything is a decision that should not be taken lightly. When you borrow money you have to pay for the privilege and this means that it will be more expensive than just paying it outright (unless you get interest free credit). This means that you will end up paying more for the item than you would if you did not borrow the money to pay for it. This means that if you are buying luxuries then you should consider whether it really is worth paying that extra money for them. If you are buying more necessary items then you may feel it is worth it or else you may struggle otherwise. It is worth calculating how much extra you will have to pay for an item and deciding whether you think that it is worth it.
Some people would consider a car to be a luxury item and others a necessity and this is why there is a mixed opinion on whether a loan should be used to pay for one. It actually depends on what you use your car for to start with. If you use it to get to work and have no alternative way to get there then it is necessary to have one if you want to keep your job. Some people may be able to use public transport, some may be able to work from home but a lot of people find that they will have to drive to get to their job or they will need a car available when at work to drive between sites or visit customers. There may be other necessary uses for a car as well as work, perhaps taking children to school, going shopping, going to hospital appointments and things like that. Obviously the public transport options and how mobile you are as well as how isolated you are will also be a big factor in whether a car is right for you.
Of course, buying a second hand cheap and efficient car to drive to work each day is very different to buying a very expensive and brand new sports car, so there could still be an argument that borrowing money for an extravagant car might not be a good thing to do. You will need to decide whether you feel that it is worth it, considering the cost of it and whether you think it offers good value for money. Obviously this will very much depend on your taste in cars but also how much budget you have to spend on repayments.
It is well worth considering whether you will be able to afford the repayments on the loan. Obviously the more money you pay for the car; the more expensive the loan will be and that means that the repayments will be dearer as well. You will need to be able to manage these for the term of the loan as well as your other expenses. Only by looking at your current spending and income, will you be able to work out whether this is something that you will be able to afford to do. It is therefore worthwhile taking some time to calculate how much of your income is left after you have paid all of your essential costs and therefore how much you could afford in terms of a loan repayment. Do remember to leave some leeway for unexpected expenses as well for little extras such as gifts, days out, clothes, evening out and things like that. If you do think that you will have very little money left then consider what that will feel like and whether you are prepared to go through that for the term of the loan just so that you can have a car.
Lastly if you have the cash to buy a car then it is better, in most circumstances, to use that rather than getting a loan. It will be far cheaper and you will not be tied to all of those repayments. You will also find it will be easier to borrow money if you need in the short term, without having a loan to repay. The exception is if you can find interest free credit. This is sometimes offered and although it should not be something that sways you towards a particular dealer because they will put up their prices to cover the loan costs, it could be better to borrow rather than paying in cash. However, you will need to save the money you would have spent on the car ready to pay off the loan at the end of the lending period or to pay towards the monthly instalments.